Cisco: BofA Downgrades; Sees Slowing Growth

By Eric Savitz

Looks like it is Cisco (CSCO) downgrade day: Bank of America’s Tim Long today dropped his rating on the stock to Neutral from Buy, asserting that “growth will slow over the next few quarters as the salesperson headcount benefit is appreciated, there is less scope for share gains, and margins are at peak.”

Long contends that “the main driver of Cisco’s re-accelerated growth has been its sales force additions,” and that “increased productivity must occur to meet/exceed” fiscal 2008 estimates. “With slower growth expectations, we believe multiple expansion is unlikely, and contraction possible.”

In an earlier post, I noted that Cisco also was downgraded today by Prudential’s Inder Singh, who went to a Neutral weighting from Overweight.

Cisco today is down 63 cents at $28.29.

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